New rule issued allowing PLN to import or export electricity

Dangerous work: Workers repair an insulator on one of state electricity company PLN’s electricity towers in Leuwinanggung, Gunung Putri, West Java. The government has issued a regulation allowing PLN to import and export electricity from and to neighboring countries. The Energy and Mineral Resources Ministry has issued a regulation on electricity exports and imports, paving the way for Indonesia to export or import electricity from neighboring countries.

The price of exported electricity cannot benefit from subsidies and trading will be subject to approval from the ministry, according to the regulation.

The rule also stated that sales cannot disrupt the quality or reliability of the local power supply in the exporting region and would be approved only if local needs were met.

Imports will be allowed for regions with an available power capacity of less than 30 percent of peak demand, provided that there are no infringements on Indonesia’s sovereignty, security or economic development.

The regulation allows for contracts of up to five years’ length and for their extension. Contract holders must submit periodic reports to the Energy and Mineral Resources Minister.

Jarman, the Energy and Mineral Resources Ministry’s electricity chief, said the regulation accommodated the implementation of the so-called ASEAN grid, which will provide the association’s member nations with a single power grid.

“All contracts made before the issuance of this regulation must adjust the content of their contracts to the regulation within six months after the implementation of the regulation,” he told reporters on Tuesday.

An energy expert from the ReforMiner Institute, Komaidi Notonegoro, said the regulation would benefit state power company PT PLN, which could generate more income by selling electricity.

“In that way, PLN can reduce its subsidy,” he said.

However, he warned that the regulation might be bad for the nation, as PLN might seek profits at the expense of meeting the nation’s energy needs.

“If a region has a power surplus, it’s better to channel the power to other regions than to export it to another country.”

By allowing Indonesia to import power, the regulation may lead to a dependence on other nations for electricity, Komaidi said.

It would be better for the government to improve the nation’s electricity infrastructure, he added.

As reported earlier, PLN intends to start large-scale electricity trading in 2014 after completing a 275-kilovolt (kV) transmission network between West Kalimantan and Sarawak, Malaysia.

The company will work with Sarawak Energy Berhad (SEB) to build the network, which will span 122 kilometers from Bengkayang, West Kalimantan to Mambong, Sarawak.

Another project, a 250-kV subsea cable transmission line between Indonesia and Malaysia, will deliver electricity from coal-fired power plants in South Sumatra to peninsular Malaysia.